Through the use of resources and the production of waste and pollution, enterprises produce costs that impact long-term human and environmental systems. The scale of the problem is immense; the sectors analysed for this report are estimated to have natural capital costs totaling $7.3 trillion, mainly from greenhouse gas emissions, water, and land use. Despite sustainability reporting by enterprises being on the rise, the quality of those reports has received little focus.

This comprehensive and detailed landmark report, produced by the United Nations Environment Programme, provides a strategic approach sustainability reporting that addresses issues that are material for both company operations, and their stakeholders. It offers guidance for companies to identify tools best suited to their needs, and gives insights into audience expectations.

The report is split into eight sections: an introduction, which discusses the research methodology; the drivers, context, and challenges for sustainability reporting at the present time; the key components and frameworks required for materiality assessments; the background of and connections between the four most reported areas of greenhouse gas emissions, energy, water, and waste; the shortcomings of sustainability reporting; an extensive chapter on improving the reporting of the four aforementioned sectors; communicating environmental data to stakeholders; and finally, looking toward the future.

The following recommendations summarise the conclusions laid out at the end of the report:

* All companies are encouraged to conduct materiality assessments that are transparent in their methodologies.
* Further harmonisation and standardisation of frameworks and tools would be of help in enhancing the quality of materiality assessments, as would catering sustainability communication to different stakeholders to ensure that reported information is meaningful, and not a wasted effort..
* Primary stakeholders that exert the most influence on the quality of corporate environmental disclosure should be the focus of active engagement, including long-term investors, governments, stock-exchanges, and other companies.
* Of the four main areas of most material relevance to companies, only greenhouse gas emissions and energy reporting are largely standardised, with clear agreements between stakeholders and universally applied guidance. Reporting on water and materials/waste on the other hand requires substantial improvement.
* Reporting on water could be improved by applying a scientific context, i.e. using scientifically based metrics to estimate maximum sustainable water usage by a company.
* The authors express support for the growing momentum behind context-based reporting, but notes that it requires a coherent and harmonised effort from governments, reporting framework developers, and the scientific community ti be effective.
* Collaborative reporting along value chains, from supplier partners to impacted stakeholders, is also important, yet increases the complexity of reporting. This could be advanced through more effective communication along value chains.
* The proportion of SMEs reporting environmental costs is far less than for large companies. SMEs would benefit from simpler guidance and tools tailored to their constraints.
* Environmental reporting must accelerate its maturity to make it as important to all stakeholders as financial reporting. Addressing the recommendations stated in this report would represent a good start.

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